Established 1958 ~ Hardball Business Litigation & Complex Negotiations

Supreme Court holds “Service Advisors” exempt under FLSA

On April 2, 2018, the United States Supreme Court held that service advisors at car dealerships are exempt from the FLSA’s overtime-pay requirements under 29 U.S.C. 213(b)(10)(A). Encino Motorcars, LLC v. Navarro, 138 S.Ct. 1134 (2018). In Encino Motorcars, the Court considered the scope of the Fair Labor Standards Act (FLSA) which requires employers to pay overtime to covered employees who work more than 40 hours a week. The FLSA exempts from the overtime-pay requirements “any salesman, parts man, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership. Service advisors at car dealerships “meet customers; listen to their concerns about their cars; suggest repair and maintenance services; sell new accessories or replacement parts; record service orders; follow up with customers as the services are performed and explain the repair and maintenance work when customers return for their vehicles.”

The Court held that a service advisor is “obviously a salesman”, since the statute did not provide a definition for “salesman” the court construed the term based off its ordinary meaning. The ordinary meaning of “salesman” is someone who sells goods or services. The Court concluded that service advisors sell service to customers for their vehicles. In addition, they are primarily engaged in servicing automobiles because they are integral to the process of providing maintenance and repair even if they don’t physically repair the car. The Court rejected the distributive canon employed by the Ninth Circuit to match “salesman” with “selling” and “parts man and mechanic” with “servicing”. The Court then examining the Ninth Circuits reliance on legislative history which it found unpersuasive. Even for “those [Members of the Court] who consider legislative history, silence in legislative history . . . cannot defeat the better reading of the text and statutory context.”

The Court relied heavily on the text of 29 U.S.C. 213(b)(10)(A), concluding that service advisors are exempt from the overtime-pay requirement because they are “Salesman . . . primarily engaged in servicing vehicles. The case was reversed and remanded for further proceedings.

For more information or to discuss an issue regarding overtime, call Sidkoff, Pincus & Green at 215-574-0600 or contact us online. Our Philadelphia overtime lawyers represent clients in Pennsylvania and New Jersey.